Last Updated on April 5, 2026 1:42 am by INDIAN AWAAZ
Restoring Trust or Testing Regulation?
By Andalib Akhter
India’s business environment has long been shaped by a dense network of laws, regulatory procedures, and compliance requirements—many of them rooted in decades-old legislation. For businesses, especially small and medium enterprises, even minor procedural lapses such as filing delays, documentation errors, or technical mistakes in regulatory forms have sometimes triggered criminal proceedings under existing statutes.
Such provisions have not only increased legal uncertainty but also imposed significant compliance costs on businesses. For micro, small, and medium enterprises (MSMEs), which often operate with limited administrative capacity, the risk of criminal liability for procedural errors has historically acted as a deterrent to expansion and innovation.
Against this backdrop, the Indian government has initiated a series of regulatory reforms aimed at modernizing the legal framework governing business activity. The Jan Vishwas (Amendment of Provisions) Bill, 2026 represents a major step in this ongoing reform agenda.
The bill proposes amendments to 79 central laws administered by 23 ministries, covering 784 legal provisions. Many of these provisions previously imposed criminal penalties—including imprisonment—for minor regulatory violations. The reform seeks to replace such penalties with civil fines, warnings, and administrative enforcement mechanisms, signaling a shift toward a more pragmatic regulatory model.
The central objective is to reduce the compliance burden on businesses while promoting Ease of Doing Business and regulatory predictability.
Rebuilding Trust in the Regulatory Environment
For investors and entrepreneurs, regulatory clarity and predictability are critical factors when making business decisions. Overly punitive legal frameworks can create an environment of uncertainty, discouraging investment and innovation.
The Jan Vishwas Bill is built on the premise that not every regulatory violation should be treated as a criminal offense. Many infractions are procedural in nature and can be resolved through corrective measures rather than criminal prosecution.
By decriminalizing minor offenses, the government aims to encourage voluntary compliance rather than punitive enforcement. In principle, this approach aligns with global regulatory trends that favor risk-based regulation and administrative enforcement over criminal penalties for non-serious violations.
A New Model of Regulatory Governance
The reform framework of the Jan Vishwas Bill is built on four key pillars designed to reshape how compliance is enforced in India’s regulatory ecosystem.
1. Warning Before Penalty
For first-time or minor violations, businesses may receive an advisory notice instead of immediate penalties. This approach allows companies to correct mistakes without facing disproportionate consequences.
2. Proportionate Penalties
The severity of penalties will be aligned with the nature and seriousness of the violation, ensuring that procedural errors do not attract excessive punishments.
3. Faster Administrative Resolution
The bill introduces designated adjudicating officers and appellate mechanisms, which are intended to resolve disputes quickly and reduce the burden on courts.
4. Dynamic Penalty Structure
The structure of civil penalties will be periodically reviewed to ensure that fines remain effective and relevant as economic conditions evolve.
Together, these measures aim to create a regulatory system that prioritizes efficiency, compliance, and economic growth rather than purely punitive enforcement.
Relief for MSMEs
One of the most significant beneficiaries of the Jan Vishwas reforms is likely to be India’s MSME sector, which forms the backbone of the country’s economy.
MSMEs frequently struggle with regulatory compliance due to limited administrative capacity. Multiple laws, reporting requirements, and licensing rules can create significant operational challenges.
For example, under the Legal Metrology Act 2009, businesses previously faced immediate penalties for failing to maintain or produce certain records. The proposed reforms introduce a corrective notice system, allowing businesses to rectify compliance gaps before penalties are imposed.
Similarly, under the Private Security Agencies (Regulation) Act 2005, companies could previously face fines of up to ₹25,000 for failing to display a license at their business premises. The new bill removes this provision, acknowledging that such procedural lapses should not attract punitive action.
These reforms aim to allow small businesses to focus on growth rather than navigating complex regulatory risks.
Simplifying Compliance for Trade and Exports
The bill also introduces changes aimed at facilitating trade and export activity. For instance, under the Agricultural and Processed Food Products Export Development Authority (APEDA) Act 1985, failure to submit returns previously attracted punitive action. Under the new framework, such violations will be addressed through warnings and civil penalties.
Similarly, the Coir Industry Act 1953 has been amended to remove penalties related to licensing requirements for exporting coir products. This step is intended to reduce outdated compliance burdens on small exporters.
These measures reflect the government’s broader objective of strengthening India’s export competitiveness by lowering regulatory barriers and reducing administrative costs.
Amendments to Key Laws
The Jan Vishwas Bill proposes changes across several major regulatory frameworks, including:
- Drugs and Cosmetics Act 1940 – Certain procedural violations will no longer attract imprisonment and will instead be subject to financial penalties.
- Apprentices Act 1961 – A graded enforcement system has been introduced, beginning with advisory notices followed by warnings and penalties for repeated violations.
- Delhi Municipal Corporation Act 1957 – Minor violations related to hawking, sanitation, and municipal procedures will now be treated as civil offenses.
- Mines and Minerals (Development and Regulation) Act 1957 – Certain offenses will replace imprisonment with financial penalties.
These reforms indicate a broader attempt to align regulatory enforcement with modern administrative practices.
Benefits for Citizens
While the bill largely focuses on business regulation, it also introduces changes that benefit ordinary citizens.
Among them:
- A 30-day grace period for renewing driving licenses, preventing penalties for minor delays.
- Replacement of criminal penalties with civil fines for misuse of public water resources.
- Decriminalization of minor violations in public transport systems, such as metro rules.
These measures aim to make the legal system more citizen-friendly and practical in everyday life.
Legislative Evolution of the Reform
The reform process began with the Jan Vishwas Act 2023, which amended 42 central laws and decriminalized 183 provisions. This was the first comprehensive effort to remove criminal penalties for minor regulatory violations.
Following further review, the government introduced an expanded reform proposal in 2025, which was referred to a parliamentary select committee for detailed scrutiny.
After extensive deliberations, the committee recommended expanding the scope of reforms. The Jan Vishwas (Amendment of Provisions) Bill, 2026 is the result of this process, significantly widening the reform agenda.
Reform with Responsibility
The Jan Vishwas Bill 2026 represents an important shift in India’s regulatory philosophy—from a system focused on punishment to one focused on compliance and efficiency.
From a business perspective, the reforms could produce several positive outcomes:
- Reduced compliance costs
- Greater investor confidence
- Easier regulatory processes for MSMEs and exporters
If implemented effectively, these measures could improve India’s business environment and strengthen its position as a competitive investment destination.
However, the reforms also raise important questions. While decriminalizing minor offenses can create a more business-friendly environment, it is equally important to ensure that regulatory oversight does not weaken. In sectors such as healthcare, environmental protection, pharmaceuticals, and mining, lax enforcement could lead to quality lapses, corruption, or risks to public safety.
Moreover, the success of a civil penalty system depends heavily on the capacity, transparency, and accountability of enforcement institutions. Without strong regulatory oversight, large corporations may treat financial penalties merely as operational costs rather than deterrents.
For this reason, the Jan Vishwas Bill should be viewed not simply as deregulation, but as an attempt to achieve balanced regulatory reform—one that encourages business growth while safeguarding public interest.
If implemented with strong institutional oversight, the legislation could mark a meaningful step toward a regulatory system built on trust, efficiency, and accountability. Without such safeguards, however, the promise of reform may remain only partially fulfilled.